Time running out for 3,500 jobs in South Africa

ArcelorMittal South Africa (AMSA) has again delayed the shutdown of its Longs Business following a R380 million cash injection.

In its financial results for the year ended 31 December 2025, AMSA said that the South African steel industry is facing its greatest challenge since the events of the financial crisis of 2008/09.

This is due to international steel-to-raw material price spreads remaining under pressure and countries rushing to protect their steel industries against unfair trade and policy practices.

The group previously announced that it would wind down its Longs Business at the end of January.

Due to AMSA’S specialised capacity, this was expected to result in between 3,500 direct and indirect job losses, with broader impacts on the manufacturing industry, such as automotive makers.

It estimated that the closure’s ripple effects could lead to 100,000 job losses.

However, AMSA said that it had delayed the closure by approximately one month to enable:

• Fulfilment of the higher-than-anticipated outstanding order book (prioritising automotive and other customers)

• Continuing discussions with the South African Government on the future of the Longs Business, with an announcement expected in the second half of February 2025.

The group said that extended operations have been enabled via funding support of R380 million from the IDC in the form of a shareholder loan. The loan is interest-free and has no fixed maturity date.

The operational EBITDA loss, before the wind-down and impairment charge, for the Longs Business amounted to R1.1 billion.

However, it is crucial to note, that AMSA has sent a large-scale retrenchment notice pending any further clarity around the future of the Longs Business, putting thousands of jobs at risk.

“Resizing of the fixed cost structure of the Company is vital in the current market environment,” said the group.

AMSA said that work continues with the South African Government and key stakeholders in the South African steel and engineering value to agree on urgent and ambitious interventions in the sector.

Outlook

AMSA said that no meaningful improvement in the steel market is expected in the next six months.

“Consequently, actions by the South African Government to support the industry and protect it against unfair trade and policy practices are vital,” said the group.

“The Longs Business will only continue with financial support as the Company does not have the ability to bear any further financial risk associated with the continued operations of that business.”

It added that the key focus areas for the first half of 2025 will be:

• Advancing discussions with the South African Government regarding the Longs Business, with an announcement expected in the second half of February 2025;
• Placing the Flats Business and market coke operations on a more sustainable financial footing with an intense focus on improving reliability, quality, on-time delivery, and customer service;
• Resizing the fixed cost structure of the Company; and
• Advancing the bankability of the Company’s high-payback investment portfolio, which includes addressing balance sheet resilience, through a potential recapitalisation.

Financials

The group’s financials do not paint a pretty picture, with revenue decreasing by 7% to R38,596 million (2023: R41,637 million) following a drop in steel sales.

The group added that the Longs Business wind-down charge, severance packages charge, write-down of inventory and impairment charges amounted to R1,813 million (2023: R2,115 million)

The group thus posted a headline loss of R5.102 million (458 cents loss per share). A large increase from the loss of R1,890 million (170 cents loss per share) in the comparable period.

The attributable loss for the year also increased to R5,839 million (524 cents loss per share) against a loss of R3,920 million (352 cents loss per share) in 2023.

Amidst the loss, the group did not declare a dividend for the year ended 31 December 2024.